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Cerner's (CERN) Acquisition by Oracle to Boost Patient Outcome
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Cerner Corporation recently announced an agreement with Oracle Corporation (ORCL - Free Report) via which the latter is set to acquire it for around $28.3 billion. The transaction, which is expected to close in 2022, is subject to the receipt of certain regulatory approvals and satisfying other closing conditions.
Following the closure of the deal, Cerner will be organized as a dedicated Industry Business Unit within Oracle.
The buyout is expected to aid Cerner in growing its community presence, including in the Kansas City, MO area, while utilizing Oracle’s global footprint to reach new geographies faster.
Rationale Behind the Buyout
Oracle and Cerner’s efforts toward the continued and enhanced management of health information will likely be reinforced by Oracle’s global operational infrastructure.
Following the buyout, Cerner’s digital information systems are expected to significantly improve healthcare delivery by providing medical professionals with better information. This, in turn, is likely to enable care providers to make better treatment decisions, thereby resulting in better patient outcomes.
Per Cerner’s management, being a dedicated Industry Business Unit is likely to provide the company with an unparalleled opportunity to accelerate the modernization of electronic health records, improve the caregiver experience and enable more connected, high-quality and efficient patient care.
Industry Prospects
Per a report by MarketsandMarkets, the global healthcare IT market is projected to reach $821.1 billion by 2026 from $326.1 billion in 2021 at a CAGR of 20.3%. Factors like the growing use of big data in healthcare, surge in demand for telehealth and technological advancements to improve clinical outcomes are expected to drive the market.
Given the market potential, the buyout agreement seems to have been timed well.
Notable Developments
Of late, Cerner has witnessed a few notable developments across its business.
In October, the company announced its third-quarter 2021 results where it recorded strong top-line growth. It also witnessed strength in majority of its business models during the quarter.
The same month, Cerner launched a new operating unit, Cerner Enviza, which offers data-driven solutions and research services to help bring clarity to multi-dimensional data via real-world evidence and insights.
Also in October, the company announced the launch Cerner RevElate, its go-forward patient-accounting product that is expected to bring new and enhanced capabilities to the Cerner revenue cycle management portfolio.
Price Performance
Shares of Cerner have gained 16.7% in the past year against the industry’s 43.1% fall and the S&P 500's 24.3% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Currently, Cerner carries a Zacks Rank #2 (Buy).
A couple of other stocks investors can consider in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp and Thermo Fisher Scientific Inc. (TMO - Free Report) .
LabCorp, flaunting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 10.6%. LH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.73%. You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp has gained 48.3% compared with the industry’s 12.4% rise over the past year.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO’s earnings surpassed estimates in the trailing four quarters, the average surprise being 9.02%. It currently carries a Zacks Rank #2.
Thermo Fisher has gained 40.8% compared with the industry’s 5.1% rise over the past year.
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Cerner's (CERN) Acquisition by Oracle to Boost Patient Outcome
Cerner Corporation recently announced an agreement with Oracle Corporation (ORCL - Free Report) via which the latter is set to acquire it for around $28.3 billion. The transaction, which is expected to close in 2022, is subject to the receipt of certain regulatory approvals and satisfying other closing conditions.
Following the closure of the deal, Cerner will be organized as a dedicated Industry Business Unit within Oracle.
The buyout is expected to aid Cerner in growing its community presence, including in the Kansas City, MO area, while utilizing Oracle’s global footprint to reach new geographies faster.
Rationale Behind the Buyout
Oracle and Cerner’s efforts toward the continued and enhanced management of health information will likely be reinforced by Oracle’s global operational infrastructure.
Following the buyout, Cerner’s digital information systems are expected to significantly improve healthcare delivery by providing medical professionals with better information. This, in turn, is likely to enable care providers to make better treatment decisions, thereby resulting in better patient outcomes.
Per Cerner’s management, being a dedicated Industry Business Unit is likely to provide the company with an unparalleled opportunity to accelerate the modernization of electronic health records, improve the caregiver experience and enable more connected, high-quality and efficient patient care.
Industry Prospects
Per a report by MarketsandMarkets, the global healthcare IT market is projected to reach $821.1 billion by 2026 from $326.1 billion in 2021 at a CAGR of 20.3%. Factors like the growing use of big data in healthcare, surge in demand for telehealth and technological advancements to improve clinical outcomes are expected to drive the market.
Given the market potential, the buyout agreement seems to have been timed well.
Notable Developments
Of late, Cerner has witnessed a few notable developments across its business.
In October, the company announced its third-quarter 2021 results where it recorded strong top-line growth. It also witnessed strength in majority of its business models during the quarter.
The same month, Cerner launched a new operating unit, Cerner Enviza, which offers data-driven solutions and research services to help bring clarity to multi-dimensional data via real-world evidence and insights.
Also in October, the company announced the launch Cerner RevElate, its go-forward patient-accounting product that is expected to bring new and enhanced capabilities to the Cerner revenue cycle management portfolio.
Price Performance
Shares of Cerner have gained 16.7% in the past year against the industry’s 43.1% fall and the S&P 500's 24.3% rise.
Zacks Rank & Other Key Picks
Currently, Cerner carries a Zacks Rank #2 (Buy).
A couple of other stocks investors can consider in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp and Thermo Fisher Scientific Inc. (TMO - Free Report) .
LabCorp, flaunting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 10.6%. LH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.73%. You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp has gained 48.3% compared with the industry’s 12.4% rise over the past year.
Thermo Fisher has an estimated long-term growth rate of 14%. TMO’s earnings surpassed estimates in the trailing four quarters, the average surprise being 9.02%. It currently carries a Zacks Rank #2.
Thermo Fisher has gained 40.8% compared with the industry’s 5.1% rise over the past year.